The Home Buying Process For The First Time Buyer
Posted at 1:37 am | Filed Under mortgage-financing-tips.info-part2-20
It is much better to pay a home mortgage loan and build equity than it is to rent and pay someone else’s home mortgage loan for them. By purchasing your own home you are investing in your own future. The possibility of owning ones own home is easily within reach, if there is someone there to help. When buying your own home there are many programs specifically tailored to meet your needs.
The US government insures many of these programs which in turn reduces the risk for a lender. Due to the reduction in risk lenders are extending more credit to first time buyers than ever before. In 2005 40% of home buyer’s were able to finance their home mortgage loan with no cash down. This dramatic increase is due to government subsidized loans. Stop paying another persons loan and begin earning equity in your own home.
The best place to start is by getting a pre-approval. The best thing one can do is have a friendly experienced mortgage company to help you through the process. There are several steps that one should analyze as a first time buyer. All of these steps will help you in during your first home purchase and first home mortgage loan.
1. Get an idea of what you can afford
There are several factors, that when combined, will tell one what is affordable as a housing expense. It is best to contact a mortgage broker to help with the calculations. Some of the criteria include, but are not limited to: income, current expenses, credit, down payment, interest, job stability, payment history, loan rate, loan term and closing costs.
2. Know your rights
You should receive a copy of a Good Faith Estimate or GFE. You need to know what the fees are associated with the home loan and the total cost of interest to you. These are called the closing costs. Although getting a low rate loan is great, one has to realize that the closing costs have an effect on the annual percentage rate. The annual percentage rate is different than the interest rate. The annual percentage rate is a calculation that includes the interest and the closing costs. It is illegal to be discriminated against based on your sex, creed, race, age, sexual preference and several other issues. You are entitled to know why you were not approved for credit if that is the case.
3. Shop around
There are tens of thousands of lenders and brokers in the United States. Find someone you are comfortable with. A lot of people do not realize that when one goes to a lender they can only take advantage of a program that the specific lender offers. By utilizing a broker you are able to take advantage of the wholesale purchasing power of that broker. A broker can generally save money from what a lender would actually charge.
4. Understand the programs available to you
There are several government insured loans that can help to relax the requirements needed to get a home mortgage loan. Last year 40% of home buyers purchased their new home with no money down. This dispels the myth that one needs to put money down in order to purchase a home and get a home mortgage loan. FHA, VA, and HUD are three government insured loans.
5. Shop for a home
Find a Real Estate agent that you trust. Finding the right home is a very important process. There are more factors involved than the home itself. Look at the school systems, the emergency service personnel, and the town or city government. Make sure the home you pick is in the place you want to live as well. Make sure you look at more than one home. Even if your first impression of the first home you look at is “This is the one!” take a look at a few more just to make sure. This, for most people, is the biggest purchase they will make in their entire lives. Take your time and be sure about the right home.
6. Make an offer
When making an offer make sure everything is put in writing. What items you would like included. Things like curtains, blinds, fixtures, chandeliers. All of these things should be listed on the purchase agreement to make sure you are getting what you requested. Simply because you place an item on the purchase agreement does not mean the seller will agree to it. It does mean that it will at least get addressed and will be factored during the negotiation. Make sure you make the sale contingent on a home inspection and have everything put in writing.
7. Have a professional inspect the home
Hire a professional home inspector. The home inspector will go through the home and make sure the home is in good condition. Although a home may look beautiful from the outside, there could be some underlying issues that would change your opinion. The home inspector will make sure all of the mechanical and electrical systems are sound and will also make sure there is no damage from water, rodents or insects.
8. Shop for home owner’s insurance
There are plenty of insurance companies out there. Just like auto insurance, the premiums can vary greatly between companies. Check several companies and make sure you are getting a good price for the coverage you need.
9. Close on your first new home
When closing on a home it is very important to read everything that you sign. It is important to get copies of the documentation prior to closing so you can go through them. You need to be able to address any concerns prior to the final signing date. If everything is in order, receive your keys, and move into your new home.
Copyright 2006 Jason P Bertrand
Jason Bertrand is the President of JPB Financial Services, Inc., a Connecticut Corporation and member of the Better Business Bureau. He has over a decade of experience in the financial services industry and is a Notary Public in the State of Connecticut. Please visit the following sites: http://www.emortgageloanstore.com, http://www.businessloansandleasing.com, http://www.jpbfin.com Feel free to contact Mr. Bertrand with any questions or concerns through jbertrand@emortgageloanstore.com, or mail to: JPB Financial Services, Inc Attn: Jason P Bertrand PO Box 552 Vernon, CT 06066 860-982-5334
Tags: buying your first home, First time buyer, First Time Buyer Mortgage, home mortgageHome Mortgage Info for First Time Home Buyers
Posted at 1:01 am | Filed Under mortgage-financing-tips.info
Home Mortgages for First time Home Buyers
Check for any programs that could give you discounts, dollars or both
If this is your first house, and you’re interested to find any special
programs that you may be eligible for, call your local government. There’s
usually someone at the city or county level who will know if there are any special programs in your area
that you can apply for. These programs can sometimes offer several thousand dollars toward the purchase of your new home.
Also, if you work for the government, have ever been in the military, have parents in the military, or teach, there may be special programs for you
through the VA. VA loans are particularly attractive because you won’t be
required to pay private mortgage insurance ($100 - $150/month) that is required
when you borrow more than 80% of the value of the property.
If you work for a large employer, ask if they have a special relationship with a bank.
Often large employers work special deals with banks for their employees to get good home mortgages. After all, employees who have a home mortgage are happier and less likely to quit. Even relatives may be willing to help you out with your down payment, so that you can get your home mortgage.
This is very common for first time home buyers. I borrowed a small amount
from my parents to help with closing costs. Others I know have borrowed the
entire amount needed to purchase a house in order to get a lower interest rate.
I recommend that you visit a few local banks or credit unions; they have an
interest in helping out locals. Many banks have at least one person specializing
in finding home mortgages for first-time home buyers. Don’t be shy, you won’t
know unless you ask. And often, a home mortgage payment is less than, or the
same as, rent. Since this is your first home mortgage, things will be easier for
you if you have a person that you can sit down and talk to. Going over the phone
or internet for your first home mortgage can leave you without someone to help
you through the process. On the other hand, some home mortgage companies may be faster than banks.
It really depends on whomever you’re working with. The bottomline is that
there are many options.
Get Pre-Qualified First (before you go house hunting):
Your first step is to get pre-qualified. This is important, because it tells the seller that you’re serious about purchasing their home and that you should be able to qualify for a home mortgage. Essentially what happens is you provide the bank or mortgage company with some information and based on your credit score and salary, they will figure how much you can afford to spend on a house. Understand that this is not a guarantee of a home mortgage, but it is close. It means that if all requirements are met on your mortgage application, you will get your home mortgage. After you pre-qualify, don’t even think about changing jobs or quitting. Also, don’t go buy a new car or something requiring a large loan. This may sound like common sense, but people do it and it has derailed a lot of home mortgages. Stay at your current place of employment for just a little longer, if you can. If you can’t, get another job and let your home mortgage company representative know what is going on. If they find out you quit right before closing, they can cancel the home mortgage. So stay where you are.
Next, find a house. This is the fun part. You can either go with a real estate agent, or find a house yourself. Bear in mind, though, that the seller is paying the agent, not you. So it won’t cost you anything to have an agent work for you. And the agent will walk you through the process.
Finally, pick your closing real estate agent. You have the right to decide which law firm will close your home mortgage. Every law firm charges something different, so call around. You could save hundreds. Your closing agent will put together the finishing touches on your purchase and help you get into your new house. If you tell them that this is your first time, they will be careful to walk you through the process.
The timeline from pre-qualification to closing can take as long as three months, so be patient.
You are not alone in your home mortgage process. As scary as it seems, everyone you talk to will want you to have the right house. And that is what makes the business great.
Buying a house changes your life. A lot like having a baby, things are never the same again for you. There are many people out there to help first time homebuyers get a home mortgage. It is an exciting time; enjoy this new experience.
Dan Lyne has owned many homes over the last 15 years. He’s had some
very good and some bad experiences. You can find more information about
home mortgage info, mortgage calculators and debt consolidation on the sites he
frequently contributes to, just follow the attached links.
Buy A Home, No Deposit, Today!
Posted at 2:12 am | Filed Under mortgage-financing-tips.info
Looking back at the history of home prices, one thing is clear - over time, home prices continue to climb. Nowadays, many people are struggling to find the necessary deposit to buy a home. They can afford the mortgage repayments okay, but paying rent, bills and other day-to-day expenses can make it extremely difficult to save a deposit.
As a result, more people are looking to borrow 100 percent of the cost of their home. That’s where an 80 20 mortgage loan can come in handy. With an 80 20 mortgage loan, the home buyer actually takes out two loans. The first loan is for 80% of the purchase price, with, not surprisingly, the 20% loan covering the remaining 20% of the purchase price. The borrower still needs to have enough funds to cover any closing costs.
The obvious advantage of an 80 20 mortgage loan is that you don’t need a down payment. So it can be great for people with the ability to make mortgage repayments, but for whatever reason may struggle to save up a deposit. It can also be used if you want to keep your savings intact, rather than using them to buy a home.
80 20 loans are very popular with young professionals. Often these buyers have good jobs and steady incomes, but paying off college debts has made it difficult for them to save a substantial sum of money.
Renters may also find an 80 20 mortgage loan useful. It often happens that a renter is paying almost as much in rent as they would pay for a mortgage payment, but for that very reason their ability to save is limited. With an 80 20 loan they can put their rent towards buying their own home, instead of giving it to the landlord.
Another advantage of an 80 20 mortgage loan, which isn’t quite as obvious, is that you can avoid paying private mortgage insurance. Because your main mortgage is only 80%, you usually won’t be required to lower the lender’s risk by taking out insurance. For bigger loans, this can mean a substantial saving.
How Does It Work?
Basically, the 80% loan is a standard home loan. You borrow 80% of the purchase price (assuming that the price isn’t over inflated), and can choose the style of loan you want - for example, an adjustable rate mortgage. So this part of an 80 20 mortgage loan is familiar to most people.
The 20% loan “piggybacks” onto the 80% mortgage. You usually get this 20% loan through the same lender, however because the lender’s risk is higher on this part of the total loan, you will be paying higher interest rates. There may also be some other fees or conditions that make it a little less attractive than a standard loan. However, in most cases, when you combine the two repayment figures, you will still end up paying less than if you’d taken out 100% finance and paid private mortgage insurance. So it can be a worthwhile option t pursue.
You might need to shop around a little to get the right combination of loans. For example, some lenders will want the loans to both be at a fixed rate of interest for a set period. Others may allow one or both to be adjustable rate mortgages. So if you want certainty about your payments for a reasonable period of time, you’ll need to find a lender that offers fixed rates. If you’re comfortable with the possibility of your payments going up, you may be better looking for adjustable rate mortgages, as initially they are usually cheaper than fixed rate mortgages. You may even be able to find a lender who will allow some portion of the loans to be interest only for a set period, which can reduce your repayments even further.
As with all mortgages, it’s important to think about your financial situation first, and be totally honest with yourself about you can afford. Take your time, shop around, and always make sure you read the details of any mortgage before you sign it. Even better, get a legal professional to read it and explain it to you.
With an 80 20 mortgage loan, you could be in your own home a lot sooner than you thought - so check them out and see if you can buy your own home today!
Get more helpful home loan tips and hints here Home Loan Zone Central
Tags: 80 20 mortgage loan, home loan, home mortgage, mortgage, no down payment, owning home